Pro Report, presented by POWERJobs: Fitch warns of credit downgrade - Talks paused in the Senate - All eyes to the House - Lawmakers, staffers could pay thousands more for insurance

Text Size

MAYDAY: FITCH WARNS OF CREDIT DOWNGRADE. Fitch Ratings early this evening put the U.S. debt on "rating watch negative." To blame: lawmakers’ inability to raise the debt ceiling in a “timely manner” before the Oct. 17 deadline set by the Treasury Department. Though the announcement is not a downgrade in and of itself, it’s certainly bad-news bears — a stern warning at best. From the announcement: “Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.” Fitch called the prolonged negotiations over raising the debt ceiling “risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency by casting doubt over the full faith and credit of the U.S.” Zachary Warmbrodt and MJ Lee have more for Pros: http://politico.pro/19MWluK

DÉJÀ VU? GRIM FLASHBACK — To Aug. 5, 2011 (Zachary A. Goldfarb for the Washington Post): “Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system. Lowering the nation’s rating to one notch below AAA, the credit rating company said ‘political brinkmanship’ in the debate over the debt had made the U.S. government’s ability to manage its finances ‘less stable, less effective and less predictable.’”http://bit.ly/XSBCvq

FISCAL DEAL MELTDOWN. So much for that short-lived hope that Congress was close to a deal to avert a debt default. … Although Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell struck a deal to end the current fiscal standoff yesterday, House Speaker John Boehner squashed it early Tuesday morning, announcing that he’d need more concessions from the White House in order to get it passed through the House. The news totally changed the mood of Capitol Hill Tuesday, where Senators skipped their Tuesday press conferences and talks came to a halt.

ALL EYES TO THE HOUSE. Can Boehner get this passed? That’s tonight’s million dollar question. Here’s Jake Sherman, Burgess Everett and John Bresnahan: “House Republican leaders are moving forward with a bill Tuesday to lift the debt ceiling, reopen government and enact a host of other policies. The bill is expected to be marked up in the House Rules Committee late Tuesday afternoon, and will make its way to the floor Tuesday evening. Republican leadership has not formally whipped the bill, and they are not sure it will pass the House."

BREAKING: The House just postponed its scheduled markup of the newest Boehner proposal, suggesting trouble is afoot … Stay tuned.

— What it looks like: Continued from above … “Republicans have dropped a provision that would have repealed a tax on medical devices. … They have also dropped a provision that would’ve required the Department of Health and Human Services to verify the income of individuals who receive subsidies under Obamacare. … Republicans are including the so-called Vitter amendment, which cancels health-insurance subsidies for Capitol Hill staffers in addition to members of Congress, the president, vice president and the White House Cabinet.” http://politi.co/GQcAML

— Reminder: The proposal will reopen the government and keep it running until Dec. 15 and lift the debt ceiling until Feb. 7.

IN THE SENATE: TALKS PAUSED. Here’s our Manu Raju for the hometown paper: “After House Republicans drew a stern rebuke from the White House for moving their own proposal, Senate leaders abruptly broke off their talks, leaving Washington with no clear path to avert a growing national crisis. Even if the House fails to pass a bill and a deal is eventually reached in the Senate, any one senator can object and delay a final resolution until after the Thursday deadline when the Treasury Department warns the country will start running out of cash to pay its bills.”

— Does Boehner’s latest move help or hurt McConnell’s negotiating position? Depends, Manu continues: “If the House fails to adopt the plan Tuesday evening, then the McConnell-Reid negotiations would resume. In many ways, Boehner’s failure would strengthen McConnell’s ability to sell the Senate proposal as the last, best possible deal for his party to end the fiscal crisis. But if the House passes its bill, then McConnell is in a far trickier position. He could demand passage of a House GOP bill Reid and the White House strongly oppose — or he could try to cut a bipartisan deal that many House conservatives are already balking at.” http://politi.co/15FoKkS

THIS IS PRO REPORT. It’s been a heck of a day on Capitol Hill. If you’re following the back and forth, too, expect to be up late into the night as the House pushes its newest plan to the floor. Send your bets this way: rbade@politico.com. Or tweet me @RachaelMBade and follow @POLITICOPro.

COMING WEDNESDAY: HOUSE GOP TO PRESS NPS ON MEMORIALS. House Natural Resources and Oversight and Government Reform Chairmen Doc Hastings and Darrell Issa will grill National Park Service Director Jonathan Jarvis at a House hearing Wednesday on NPS’ decision to shutter the National Mall’s open-air monuments during this government shutdown. Republicans are accusing the administration of doing so needlessly but purposefully to agitate the general public in hopes that the negativity would fall on the GOP.

**A message from POWERJobs: New jobs on our radar this week: Marketing/Sales Representative at Boeing, Senior Advisor, Campaign Strategy at AARP and Assistant Vice President, Federal Government Relations at Illinois Hospital Association. Interested? Apply to these jobs and more at www.POWERJobs.com; finally, a career site made for YOU!**

TOP PRO STORY:

LAWMAKERS, STAFFERS: YOU COULD LOSE $5,000. A huge GOP push in these negotiations is to ditch the infamous Obamacare subsidies for staff and lawmakers — but what would that mean for them financially? Jennifer Haberkorn on Pro Health has an answer: “Lawmakers and Hill staffers could pay at least $5,000 more for their health insurance under Obamacare next year if the federal contributions to their health plans are eliminated. … [I]t’s a vote that could hit lawmakers directly in the pocketbooks. Under the health law, lawmakers will have to buy gold-level health insurance plans next year on D.C. Health Link, Washington’s health insurance exchange. Those policies cost between $539 and $960 per month for a 55-year-old. If the federal contribution is eliminated, lawmakers will have to pay the entire tab. If they keep the contribution that most federal workers get, they would pay only about one-quarter of that amount.

“Lawmakers have 112 gold-level insurance plans to choose from on the D.C. exchange, with yearly premium costs for a 55-year-old ranging between $6,468 and $11,520. Lawmakers who are older could see even higher costs since insurers can use age when factoring premiums. Family plans would cost more, too. … Staffers, who might see their contributions eliminated also, would likely see lower costs than their older bosses. Gold-level plans on the D.C. exchange for a 27-year-old, for instance, cost between $226 and $403 per month.” Full story: http://politico.pro/H25LHR

MORE ON PRO TODAY —

REPUBLICANS’ ROLE IN FISCAL FIGHTS PROLONG FED POLICIES THEY OPPOSE. Jon Prior and MJ Lee on Pro Finance: “Congressional Republicans want the Federal Reserve to end the easy money policies that they argue amount to too much Big Government and a prescription for inflation. But the recent fiscal showdown that has been spurred on by the GOP’s attempt to make changes to Obamacare is likely leading the Fed to keep these very policies in place amid worries that the government shutdown and the standoff over the debt ceiling have already hurt the slowly recovering economy …”

“[T]he Fed has been buying $85 billion a month in Treasury and mortgage backed bonds to keep interest rates low in hopes that will spur investment and spending, which in turn would help economic growth and employment. Earlier this year, Fed officials had signaled that as early as the fall they would begin scaling back, or tapering, these asset purchases — known as quantitative easing — as unemployment ticks down. Now, the only thing Fed officials are tapering are expectations that they will soon pull the reins on the central bank’s stimulus program.” http://politico.pro/1bvDsvs

SCOTUS TO TAKE NARROW LOOK AT EPA GREENHOUSE GAS RULES: Erica Martinson reports on Pro Energy: “The Supreme Court said today that it will look at the Environmental Protection Agency’s early efforts to craft greenhouse gas regulations, offering critics hope that the justices could imperil the future of President Barack Obama’s climate strategy. But greens breathed a sigh of relief, saying the narrow scope of the court’s announcement makes it unlikely that the case will jeopardize EPA’s attempts to limit carbon emissions from power plants, the nation’s biggest greenhouse gas source.

The court passed up a chance to reconsider whether EPA can regulate greenhouse gases at all — the court answered ‘yes’ in 2007 — or question whether the agency used sound legal and scientific judgment in doing so. Instead, the court agreed to consider just one question: 'Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.' Environmentalists said that even if the court knocks down the automatic trigger for stationary sources, EPA can still limit greenhouse gases from power plants using other programs.” http://politico.pro/1bvP6GN

**A message from POWERJobs: Tap into the power of POWERJOBS for the newest job opportunities in the Washington area from the area’s top employers, including HealthSouth, U.S. Chamber of Commerce, Raytheon and Comcast Business. Powered by names you trust — POLITICO, WTOP, WJLA/ABC-TV, NewsChannel 8 and Federal News Radio — POWERJOBS is the ultimate career site with more than 2 million job searches and nearly 17,000 applications submitted this year so far. Connect through Facebook or LinkedIn, search jobs by industry and set up job-specific email alerts using www.POWERJobs.com, the site for Washington’s top talent.**